by Structured Settlement Watchdog
CrowFly, LLC claims that its "proprietary platform removes the middleman from the selling process, so you can get the most money from selling your structured settlement payments". A noble goal, but it doesn't always work out that way.
On September 24, 2021, CrowFly submitted a structured settlement transfer Petition to New York Supreme Court in Oneida County for a proposed transfer of the structured settlement payment rights of Lee Watkins, Jr. The structured settlement was established December 13, 2012. An annuity purchased from First Berkshire Hathaway Life to fund a periodic payment obligation arising from as part of a settlement with a State Farm insured. The 2021 CrowFly petition bore a 9.29% discount rate.
In the Matter of the Petition of CROWFLY, LLC for the Approval of Transfer of Structured Settlement Payment Rights
in Accordance with GOL §5-1701, Petitioner, -against- LEE WATKINS, JR., BHG STRUCTURED SETTLEMENTS, INC., A MISSOURI CORPORATION and FIRST BERKSHIRE HATHAWAY LIFE INSURANCE COMPANY, Respondents Index No.: EFCA2021-002332
Berkshire Hathaway intervened, and the Court denied CrowFly's petition. Their affidavit is educational. Here is an excerpt:
"BIFCO prefers to only purchase the fewest future payments, or smallest portions thereof, adequate to provide the payee with enough money to alleviate his or her stated hardship. In many cases, this leaves the payee with payments, or portions thereof, left over for his or her support that would otherwise have been sold and transferred away through an alternative transaction with another third-party factor. BIFCO can also discuss other scenarios with the payee to meet his or her needs.
By way of comparison in the instant Transfer Case, if Mr. Watkins has a demonstrable need for 21,000.00, and submits a satisfactory application with evidence of a hardship, a BIFCO hardship exchange transfer under the terms described above could provide him with an immediate payment of approximately $21,000.00 through BIFCO's purchase of 85 future payments of $316.80 escalating 3% annually (as opposed to 85 payments of $350.00 escalating 3% annually that Crowfly intends to purchase). BIFCO could also discuss other options with Mr. Watkins.
According to BHG and FBHL's records, Mr. Watkins contacted FBHL in November 2020, and discussed the BIFCO Hardship Exchange Program. Mr. Watkins indicated that he needed $15,000.00 to get his own apartment. BIFCO mailed a Hardship Exchange Program application to him on November 19, 2020, but it was returned incomplete. As of the date hereof, BIFCO has not received a completed application from him. If CrowFly were to offer Mr. Watkins comparable terms in the instant matter, BHG and FBHL would not object to the proposed transfer on the basis of its terms. By describing BIFCO's Hardship Exchange Program, BHG and FBHL wish to assist the Court by providing information that may be helpful in making its "best interests" determination and, specifically, to advise the Court that Crowfly's proposed discount rate is higher than Mr. Watkins might be charged in a different transaction. None of BHG, FBHL or BIFCO intends to profit from any transaction entered into with Mr. Watkins pursuant to the Hardship Exchange Program. The applied discount rate and administrative charge are calculated and set with the intention of offsetting costs and/or potential losses to BIFCO associated with hardship
Ironic that the founder and former CEO of Milestone Consulting and co-founder and former CEO of CrowFly, LLC had this to say on March 5, 2018:
"Berkshire Hathaway appears to be doing something about it. They are running a pilot program in about 10 states where they are providing education and information to the annuitants that hold their paper. This is a good start. They are buying their own paper back at 6.5 percent and 7 percent discount rates. A very good deal for Warren Buffett, and a source of competition for market makers JG Wentworth" John T. Bair " Evolution of the Structured Settlement Industry" Milestone Legal Examiner.
The Obvious Question
The obvious question is if CrowFly had knowledge of this, why did CrowFly come in at a 9.29% discount rate on Lee Watkins? It sure would be interesting to learn if Bair/Milestone placed the Watkins structured settlement annuity with First Berkshire Hathaway in December 2012.
The Question that Begs
Given what surfaced from my research as set forth in the immediately prior post, one can't help wondering whether Lee Watkins Jr's First Berkshire Hathaway structure, was another structured settlement written by Bair/Milestone and attempted to be factored by CrowFly?
Related Reading About Berkshire Hathaway Hardship Exhange
A prior blog that discusses how Berkshire bested a Peachtree rate